In an effort to foster innovation and collaboration within the financial services industry, UK Finance has unveiled plans for a new UK Regulated Liability Network (RLN) experimentation phase. Partnering with eleven prominent members, including Barclays, HSBC, Lloyds Banking Group, and Visa, the initiative aims to explore innovative solutions for digital money management, transactions, and settlements in evolving digital marketplaces.

The UK RLN seeks to serve as a common platform for innovation, facilitating various forms of money, including existing commercial bank deposits and tokenised commercial bank deposits. By leveraging blockchain technology and a shared ledger, the network endeavors to enhance payment options, mitigate fraud risks, and streamline settlement processes, ultimately benefiting customers, businesses, and the broader UK economy.

The experimentation phase will focus on three key use cases: payment-upon-delivery for online marketplaces to combat fraud, improving transparency and reducing fraud in home buying processes, and enabling digital bond settlement to connect digital customer money with digital assets. Through these use cases, the UK RLN will explore how it can accommodate different forms of money, including both existing and tokenised deposits.

Running until summer 2024, the experimentation phase will assess foundational capabilities, technical feasibility, and the legal framework of the UK RLN design. Results from the experimentation will be published afterward, with UK Finance hosting engagements and events to facilitate discussions among stakeholders, including innovators, technology companies, and FinTechs.

Jana Mackintosh, Managing Director at UK Finance, emphasized the importance of collaborative efforts to develop inclusive designs for digital money. Meanwhile, industry leaders like Lee Braine from Barclays and Tom Wood from HSBC underscored the significance of payments innovation in enhancing customer experiences and driving efficiency and security in financial transactions.

As the financial landscape continues to evolve, initiatives like the UK RLN play a pivotal role in shaping the future of money and asset movement, ensuring the UK remains at the forefront of financial services innovation and global competitiveness.